VA loans offer eligible borrowers a number of benefits. Not sure you can qualify? Not so fast. Here are five things you may not know about the VA loan program.
1) Eligibility for VA loans is not limited to U.S. military veterans and servicemembers: According to the VA, eligibility for VA home loans may extend to unmarried surviving spouses of deceased servicemembers and veterans who were killed in action or died from service-related disabilities. Others potentially eligible for VA loans include “certain U.S. citizens who served in the armed forces of a government allied with the United States in World War II.”
The VA also notes that applicants with service in certain organizations including the Public Health Service, U.S. military, naval and Coast Guard Academies, midshipmen in the U.S. Naval Academy, officers of the National Oceanic and Atmospheric Administration, and merchant seamen with World War II service may be eligible for VA home loans and that others may qualify for eligibility.
According to VA regulations, spouses of servicemembers declared to be missing in action or prisoners of war for more than 90 days may also be eligible for VA home loans on a one-time basis. Documentation for determining eligibility for a VA home loan varies according to eligibility categories.
2) The VA loan process requires prospective borrowers to obtain a certificate of eligibility from the VA: Before you can apply for a VA home loan, you must establish benefits eligibility through the VA. There are three ways to apply for a Certificate of Eligibility for a VA home loan. You can apply through the mail, online. or through a VA approved mortgage lender that can process your request for eligibility online.
3) The VA has no minimum credit score requirements: The VA home loan program does not require minimum credit scores for loan approval, but lenders are required to document borrowers’ ability to repay VA loans. The VA does not make home loans, but instead guarantees mortgage lenders against losses connected with defaulted VA loans. Mortgage lenders may add their own lending requirements to minimum VA requirements; if one lender doesn’t approve your application for a VA home loan, it’s wise to continue shopping other VA approved lenders as loan approval requirements can vary.
4) Home loan benefits can be used in conjunction with Housing Grants: Borrowers with eligible service-related disabilities can apply for housing grants through the VA. These grants can be used along with VA home loans to construct or adapt new or existing housing to accommodate needs of veterans with eligible service-related injuries and disabilities. Family members of veterans with eligible service-related disabilities may also qualify for VA housing grants. For example, a parent or sibling may apply for a housing grant for a disabled veteran who occupies the home being adapted. Grant applications are approved directly by the VA.
5) VA home loan benefits may be used more than once: Borrowers of VA loans who sell their homes and obtain a release of liability from the VA may qualify to reuse their home loan benefits. In general, a veteran can reuse his or her home loan entitlement after selling his or her home and paying off their original VA home loan, or if an eligible buyer agrees to assume a homeowner’s existing VA loan and substitute his or her VA loan liability for the original borrower’s VA liability.
The benefits of VA home loans are hard to beat for eligible borrowers. To learn more about VA loan requirements and eligibility, please request VA loan quotes from our network of VA approved mortgage lenders.